The Gulf region seeks to escape dependence on the Strait of Hormuz

For decades, the map of the Gulf’s energy exports converged on a single choke point: the Strait of Hormuz. Now, the Iran war has motivated countries to find ways to escape dependence, by pouring billions of dollars to build more pipelines, storage facilities and railways.

“The legacy of the crisis will lead to the building of infrastructure to avoid the Strait of Hormuz,” said Hamad Hussain, a commodities economist at London-based research firm Capital Economics.

Last week, the Iraqi cabinet approved a plan to boost oil exports by pipeline through the Kurdistan autonomous region to Ceyhan port (Türkiye). Accordingly, this country builds an additional pipeline connecting Basra with Haditha, 700 km long, with an investment of 1.5 billion USD.

When completed, the output of the Kurdistan-Türkiye route will increase more than three times, from 220,000 barrels to 770,000 barrels per day. At the same time, Baghdad is trying to renovate an unused pipeline, allowing it to pump oil directly to Ceyhan port without going through Kurdistan.

Expanding the pipeline network is urgent, as Iraq’s oil exports have been nearly clogged since the outbreak of hostilities in Iran. According to data released by the country in the middle of last month, oil export output through the Strait of Hormuz in April was only 10 million barrels, compared to 93 million barrels before the conflict broke out.

Similar to Iraq, the UAE is accelerating the construction of a new pipeline to bring crude oil to Fujairah – a strategic port city located outside the Strait of Hormuz. On May 15, Abu Dhabi Crown Prince Sheikh Khaled bin Mohamed bin Zayed Al Nahyan called for accelerating the progress of the project.

The project is expected to operate next year, helping the state-owned Abu Dhabi Oil Company (ADNOC) double its export capacity. “Energy security is no longer just about maintaining production. It involves routes, accessibility, storage and redundancy,” said Mr. Al Jaber, CEO of ADNOC.

The UAE simultaneously strengthened its trade network and reserves. Mr. Al Jaber said he has secured additional supply for Asian customers and is expanding oil storage to prevent future fluctuations. Meanwhile, Oman takes advantage of ports in the Gulf of Oman to market its oil storage and export capacity.

In addition, Gulf countries are also discussing accelerating a long-planned railway project. According to Capital Economics, this will be an additional method of transporting oil, but the output is smaller than pipelines or ships.

However, escaping the Strait of Hormuz will not be easy because this is the most economical export route. This ambition requires time, money and delicate cross-border diplomacy. For example, Iraq’s pipeline requires agreements with Jordan, Syria or Türkiye on security, transit and export rights.

Pipeline exports cannot completely replace the Strait of Hormuz. According to the International Energy Agency (IEA), Saudi Arabia’s East-West pipeline and the route to the UAE port of Fujairah have a total available capacity of about 3.5-5.5 million barrels per day.

Since the war, Saudi Arabia claims its pipeline is transporting up to 7 million barrels per day, but that is still much lower than the about 20 million barrels of crude oil and petroleum products that once passed through the Strait of Hormuz.

In addition, land infrastructure is not guaranteed to be safe. Saudi Arabia’s East-West pipeline was attacked by Iran in April. Similarly, the port of Fujairah (UAE) was once the target of drones.